Forest Components makes aircraft parts. The following transactions occurred in July.

1. Purchased $16,970 of materials on account.

2. Issued $16,890 in direct materials to the production department.

3. Issued $1,350 of supplies from the materials inventory.

4. Paid for the materials purchased in transaction (1) using cash.

5. Returned $2,120 of the materials issued to production in (2) to the materials inventory.

6. Direct labor employees earned $32,100, which was paid in cash the month.

7. Purchased miscellaneous items for the manufacturing plant for $17,320 on account.

8. Recognized depreciation on manufacturing plant of $36,100.

9. Applied manufacturing overhead for the month.

Forest uses normal costing. It applies overhead on the basis of direct labor costs using an annual, predetermined rate. At the beginning of the year, management estimated that direct labor costs for the year would be $436,000. Estimated overhead for the year was $388,040.

The following balances appeared in the inventory accounts of Forest Components for July.

Beginning Ending

Materials Inventory ? $12,490

Work-in-Process Inventory ? $10,640

Finished Goods Inventory $2,640 $6,930

Cost of Goods Sold ? $73,600

Required:

a. Prepare journal entries to record these transactions.

b. Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold.